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Advisers split on whether the remortgage frenzy can go on

IFAs are split on whether the current level of remortgaging is sustainable.

The MM/One Account Annual State of the IFA Nation poll shows opinion is divided, with 52 per cent saying that remortgaging will slow down this year.

But 42 per cent of advisers are not only confident that remortgaging will continue to prop up the market this year but they also predict an increase in remortgage business.

The Council of Mortgage Lenders which has attributed the strength of the current housing market to remortgaging and has expressed concerns that remortgage levels are “running away”.

It had indicated that remortgaging is set to continue, adding to the Bank of England&#39s theory that equity withdrawal will continue to fuel consumer spending.

Average rates of interest on new loans have fallen, adding to the attraction of refinancing into cheaper deals. In January remortgaging soared to £9.6bn, accounting for 52 per cent of overall lending.

The Mortgage Operation managing director Mark Charlesworth says: “The figures for January were certainly very strong. The numbers are up from 2002 to 2003. Yes, I think that even more remortgage business will be done as the buying market becomes a little more subdued. Advisers should have confidence in this area of the market. As long as lenders are willing to offer these rates.

“Most brokers, if they are doing their job properly, are already telling their clients they will be contacting them again in two or three years to discuss remortgaging.”

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